I’m normally not the kind of guy that goes around saying no to $200 checks, but this week I got pretty upset at my insurance company when they tried to give me money. I refused the check and am happy I did. No, I haven’t gone crazy, and I might have saved myself a nice little amount of money. Here is the story.

The CLUE report

The reason I refused to take the money is because of a little known report called the CLUE report. A CLUE report is like a driving record for your homeowners insurance. Just like a speeding ticket on your driving record can increase your auto insurance, a red mark on your CLUE report can be bad news for your homeowner’s insurance. Trying to keep my CLUE report nice and clean is how this whole story happened.

The story

When my tenant alerted me to some water damage in the garage of the rental home I own I went to check it out. I saw there was some damage to the roof above the garage along with the ceiling to the garage. I didn’t want to report this to my insurance company unless I really had to, so the first person I called was a contractor friend of mine.

The contractor took a look even though roofs and ceilings weren’t exactly his speciality and advised me that the damage was bad enough I should have an insurance adjuster look at it. This turned out to be bad advice, but it is exactly what I did.

I called my insurance agent and the first question I asked was whether my CLUE report would be hit, if I just had an the insurance agent have a look and give me an estimate. My agent assured me it wouldn’t count against me unless I filed a claim, so I went ahead and scheduled an appointment.

My deductible is $1,000, so the bill would have to be fairly high before it made sense to make a claim. When the insurance adjuster took a look, he estimated the damage at less than $1,000. Good news! Not very friendly to my wallet, but at least it wouldn’t damage my standing with the insurance agency. I told the adjuster to just forget about the whole thing and I would pay for everything out of my own pocket.

I called a roofing company, and sure enough they fixed everything up for quite a bit less than my $1,000 deductible. I thought I was over and done with this project, but then something scary happened.

Early this week a check for $200 showed up in my mailbox from the insurance company. I was really confused, but according to the paperwork somebody had decided the damage I had suffered was worth $1,200, so they wrote me a check for the difference between the $1,200 in damage and my $1,000 deductible.

I got angry and called my insurance company and told them I didn’t want their $200 because of the additional premiums I would have to pay after it hit my CLUE report. They assured me if I gave them the check back they would cancel the claim so there would be no harm done. I handed the check over as fast as I could.

The lesson

Filing a claim on your homeowners insurance might get you a check, but will lead to bigger premiums down the road. Make sure that check is worth it. Don’t file small claims to get small checks that will be eaten up by big premium increases next year.

I like to raise my premium to $1,000 so I won’t be tempted to make a claim. If a claim will be just a little more than your deductible, it isn’t worth it. Don’t make a claim unless it will get you a big check that will amount to more than how much your premiums will rise.